Iceland has blamed Rachel Reeves for fuelling higher food prices, months after its Labour-backing chairman told businesses to stop complaining about the Budget.

Bosses said the supermarket “will inevitably have to pass [some cost increases] on to consumers” after food makers were struck by an increase in both employers’ National Insurance contributions and the National Living Wage.

Iceland said: “We are doing our utmost to offset the growing input cost pressures caused by suppliers seeking to recover the increase in their own labour costs arising from last autumn’s Budget, but will inevitably have to pass some of these on to consumers, where we can do so without weakening our own price position in the marketplace.”

In accounts published this week and signed off in July, the company said it was now expecting UK food price inflation to peak at between 4pc and 5pc in the next six months.

The comments follow warnings over the rising cost of the weekly shop, with the Bank of England this week saying it was expecting increases for the rest of the year.

Officials said supermarket price rises had been fuelled by government policy, pointing to the increase in the minimum wage, the Chancellor’s tax raid and a net zero packaging levy.

Faster than expected increases in food prices are set to send the overall rate of inflation to a peak of 4pc in September.

The higher prices at Iceland come after the supermarket’s chairman Richard Walker previously urged rival grocery bosses to stop “wallowing” and “complaining” about Ms Reeves’ tax raid.

Mr Walker, a former Tory donor who changed allegiance in January 2024, said in December: “This isn’t a time for businesses to wallow… The Government isn’t going to change its mind. It was a tough Budget, but we adapt.”

Credit rating agency Fitch recently raised concerns over Iceland’s profitability, suggesting the supermarket chain would have to invest in price cuts this year at a time when it is battling higher costs.

It said the supermarket, which employs more than 30,000 people, would face “momentary profit pressure”.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.